Directors Duties Under the Companies Act 2015 in Kenya

Updated 27 October 2026

Saying yes to a company board seat, whether at a family business, a startup, a Sacco-owned company or a listed firm, means taking on directors duties under the Companies Act, 2015. Directors who ignore them can be sued by the company, disqualified, or held personally liable in some cases. This guide sets out the six general duties and the duty to declare interests in plain English, with the section numbers, and what each one means in practice.

Updated October 2026.

Source: Companies Act, 2015 (No. 17 of 2015), Part IX, Division 2, general duties of directors (sections 140 to 147) and the duty to declare interests (section 151). Checked on 27 October 2026. General information, not legal advice.

Who owes these duties

The general duties apply to every director of a Kenyan company: executive and non-executive, paid or unpaid, appointed by shareholders or nominated by an investor. Section 140 says the duties are owed to the company, not to individual shareholders, and that they replace the older common law and equitable rules on which they are based. Courts still use those older cases to interpret the duties.

A nominee director, for example one put on a board by a lender or investor, owes the same duties to the company. Representing the nominator’s interests never overrides the duty to the company itself.

The seven duties

1. Act within your powers (section 142)

A director must act in accordance with the company’s constitution (its articles of association) and use powers only for the purposes they were given. Using a power to allot shares, for example, to block a takeover or entrench yourself, can breach this duty even if the paperwork is in order.

In practice: read the articles and any shareholders’ agreement before your first meeting.

2. Promote the success of the company (section 143)

A director must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. In doing so, the Act requires directors to have regard to matters such as the long-term consequences of decisions, the interests of employees, relationships with suppliers and customers, the impact on the community and environment, the company’s reputation, and the need to act fairly between members.

In practice: board minutes should show that these factors were considered on major decisions.

3. Exercise independent judgment (section 144)

Directors must make their own decisions. They can take advice and they can act under an agreement the company has properly entered into, but they cannot simply vote as a major shareholder or the CEO tells them.

4. Exercise reasonable care, skill and diligence (section 145)

The standard has two parts. A director must show the care, skill and diligence expected of a reasonably diligent person with the general knowledge, skill and experience that may reasonably be expected of someone doing that director’s job, and also the knowledge, skill and experience that the director actually has. An accountant on the audit committee is held to a higher standard on the accounts than a lay director.

In practice: read the board pack, ask questions, and get your concerns minuted.

5. Avoid conflicts of interest (section 146)

A director must avoid situations in which they have, or could have, a direct or indirect interest that conflicts, or may conflict, with the company’s interests. This covers exploiting property, information or opportunities the director learns about through the company, even if the company could not have used them. A conflict can be authorised by the other directors in line with the Act and the articles.

6. Don’t accept benefits from third parties (section 147)

A director must not accept a benefit from a third party because of being a director, or because of doing or not doing something as a director, unless accepting it cannot reasonably be regarded as likely to give rise to a conflict of interest. Gifts from suppliers bidding for a company contract are the classic risk.

7. Declare interests in proposed transactions (section 151)

If a director is directly or indirectly interested in a proposed transaction or arrangement with the company, they must declare the nature and extent of that interest to the other directors before the company enters into it. Typical examples are the company renting your building, hiring your relative’s firm or buying from a supplier you own shares in.

What happens if a director breaches a duty

• The company can sue the director, and shareholders can in some cases bring a derivative claim on the company’s behalf.
• Courts can order the director to pay compensation, give up profits made, or set aside a transaction.
• Serious misconduct can lead to disqualification from acting as a director.
• Other laws add their own liabilities, for example for unremitted PAYE, VAT or statutory deductions, and for trading while insolvent under the Insolvency Act, 2015.

Six habits that keep directors safe

1. Read the articles, the shareholders’ agreement and the last year’s minutes before your first meeting.
2. Keep a written register of your interests and update it when anything changes.
3. Insist on board papers in good time, and ask for professional advice when a decision is outside your expertise.
4. Get your dissent or questions recorded in the minutes.
5. Ask whether the company has directors’ and officers’ (D&O) liability insurance.
6. Check that statutory filings and tax payments are up to date. You can confirm a company’s details through the Business Registration Service.

State corporations and listed companies

Directors of state corporations also follow the State Corporations Act and the Mwongozo Code; see how to get a seat on a state corporation board. Directors of listed companies must also comply with the CMA Code of Corporate Governance Practices for Issuers of Securities to the Public, and their pay is disclosed in annual reports, as tracked on our CEO salaries in Kenya page.

Directors duties Companies Act: frequently asked questions

What are the duties of a director in Kenya?

Sections 142 to 147 of the Companies Act, 2015 set out six general duties: act within powers, promote the success of the company, exercise independent judgment, exercise reasonable care, skill and diligence, avoid conflicts of interest, and not accept benefits from third parties. Section 151 adds the duty to declare interests in proposed transactions.

To whom are directors’ duties owed?

To the company, under section 140, not to individual shareholders.

Do non-executive directors have the same duties?

Yes. The general duties apply to all directors.

Can a director be personally liable?

Yes, for breach of duty and under other laws such as tax and insolvency law in some situations.